I don’t want to spend my day debating health care with Dick Armey, especially since, as noted previously, I don’t really know what I’m talking about. So I’ll just let
young Klein the ever-popular young collectivist E. Klein do the hard work on Armey’s claim that “health care regulations leave us worse off by an amount equal to 11 percent of health spending.”
There are two replies to this question. The first is which regulations, kemosabe? Among the regulations you’re paying for are those that ensure purity in medications, sanitary conditions in hospitals, and standards in treatment. So if we’re going to play the cutting game, I’d like a list of what regulations Armey plans to cut, and how much each one of them costs. And I’d like it stat. And maybe, while we’re at it, a reference for that 11 percent figure, as a quick search turned up no similar data.
What I do have a reference for are private vs. public administrative costs. Studies have found that overhead in the private insurance system — little things like underwriting, and trying to deny you coverage, and advertising — account for up to 31 percent of US health care spending. If we had a Canadian style system, we would’ve saved $209 billion in 1999 — far more than Armey’s nameless “regulations” are costing us. And I’d take some sanitation regulations over the claims department at my insurer anyday. Meanwhile, here’s a fun fact — government systems hold down bureaucracy more effectively than private system. The study found that “between 1969 and 1999, administrative and clerical personnel in the United States grew from 18.2 percent to 27.3 percent of the health work force. In Canada, those personnel grew from 16 percent in 1971 to 19.1 percent in 1996.” Armey seems unconcerned by these costs.
Update: Many thanks to Fred Jones, who in the comments to my earlier post has given me a name for Ezra Klein that I think I can stick with (see above).